India’s two largest aviation hubs, Delhi and Mumbai, have sharply cut taxes on aviation turbine fuel, offering a major cost breather to the airlines. This decision comes after the soaring jet fuel prices triggered by the Iran war and rising operational expenses. Read on!
Mumbai-Delhi To Cut Taxes On ATF
As per a report by NDTV, Delhi reduced the VAT on ATF from 25% to 7% for six months, while Maharashtra cut Mumbai’s ATF VAT from 18% to 7% for domestic flight operations. As per the portal, the industry experts state that the move could substantially enhance the operating economy because the two metro hubs together are responsible for a significantly large share of India’s passenger traffic, long-haul connectivity, and aircraft fuelling activity.
The tax relief comes after the airlines warned the government that the fuel crisis was harming route operations. In a formal communication sent to the Ministry of Civil Aviation on April 26, the Federation of Indian Airlines (FIA), which represents Air India, IndiGo, and SpiceJet, stated that fuel costs had surged to 55 to 60% of operating expenses, compared to 30 to 40% before the conflict intensified. The sharp rise followed interruptions around the Strait of Hormuz after the US-Iran conflict escalated.
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Why Are Delhi & Mumbai The Key Hubs?
As per reports, Delhi’s Indira Gandhi International Airport accommodated nearly eight crore passengers in 2024-25, according to figures quoted by Chief Minister Rekha Gupta, thereby making it India’s most crowded airport. Mumbai airport handled 55.5 million passengers in 2025 and recorded more than 331,000 aircraft movements.
Together, the two airports are known as the backbone of India’s aviation network, managing a significant share of domestic traffic, international operations and airline hub connectivity. This means airlines buy huge volumes of fuel at these airports every day, making tax reductions made at Delhi and Mumbai far more significant than similar cuts at smaller airports.
According to the Petroleum Planning and Analysis Cell (PPAC), India utilised around 764 thousand metric tonnes of ATF in February 2026. Directorate General of Civil Aviation (DGCA) data revealed that domestic airlines carried nearly 167 million passengers in 2025.
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Industry experts highlight the concentration of fuelling activity at Delhi and Mumbai, which means even a small reduction in VAT can turn into substantial savings for airlines operating extensive domestic and international networks.
What are your thoughts about it?
Cover Image Courtesy: Wikimedia Commons
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FAQs
What is the full form of ATF in India?
In India, the most common full form of ATF is Aviation Turbine Fuel.
What is the tax on aviation fuel in India?
VAT on ATF, which is levied by state governments, remains a significant cost component and varies widely across states, often ranging from 4% to 30%.
How much jet fuel for 1 hour?
Jet fuel consumption varies widely by aircraft size and type, generally ranging from around 490 liters per hour for small private jets to over 15,000+ literes per hour for large passenger planes.